Last Updated on October 20, 2022
If you’re like me, whenever I travel somewhere or talk to somebody that travels to an exotic place, the first thought that comes to mind is what it would be like to live there. As you travel, it’s difficult to leave. I see it more every time I go anywhere. But to live somewhere exotic, you need to understand the local real estate market and regulations.
The Global Real Estate Market Trends
As a crucial part of the global economy, the real estate market is closely aligned with the performance of the world’s economies. Residential real estate makes up the most significant portion of the industry.
So why is this important for you? Well, as you explore different parts of the world, imagine living there. To make it a reality, you’d need to understand how the local real estate market works and how the global real estate market trends impact the local real estate market.
I wrote about my travels to the Bahamas and swimming with the pigs at Pig Beach. One of the things I loved about my trip was that as I started to learn more and more about the area, I learned that 700 islands made up the area.
My time spent in the Bahamas was so great. Maybe it inspired you to travel there or even consider moving there permanently. If so, understanding the local real estate market is something you need to know to make an educated decision.
Why Choose the Bahamas
One thing to consider is that outside of the fantastic weather and beaches, owning homes in the Bahamas is a beautiful thing in a standard year. The primary reason is that of the 700 islands in the area, only 30 are inhabited. That means that livable real estate is finite, helping push prices upward.
For example, luxury real estate in the Bahamas is in a holding pattern, as is most of the residential real estate in the area. So, if you were looking to buy a home in the Bahamas, you may want to hold off for a bit.
In fact, the global real estate market is slowing down due to various influences. These include factors such as climbing interest rates, a growing number of new housing projects, inflation affecting the price of building materials, and supply chain issues over the past couple of years.
With residential real estate, prices are determined by demand, interest rates, and available inventory. So in a place like the Bahamas, fewer homes are available to buy, which drives prices higher.
However, the islands aren’t as populated as a big city in the United States, which lowers demand and lowers prices. Finally, the rising interest rates are slowing down as buying a home and taking a mortgage is becoming more expensive.
But even with interest rates sitting at about 6.75%, the mortgage rate is still less than the average rate of appreciation on a home. Of course, that means you’re paying more for your loan, but the value of your home is rising more than the rates paid on the loan–making it still an attractive opportunity.
This is especially true whenever I get home from traveling. I always feel like there’s something left behind, something I missed out on and want to discover. That’s where my thoughts about living there come from, but in the end, I enjoy traveling too much to lock down on just one exotic location.
Consider a Vacation Home
But, if you absolutely fall in love with a certain locale, one thing to consider is buying a vacation home. Before you try to buy some property, understand the rules for foreign investment first. For example, some countries don’t allow foreign nationals to own real estate but enable citizens to co-own with foreign nationals.
The benefits of owning real estate in another area you have as a vacation home include the opportunity to visit a permanent place to stay. That said, you can have various benefits by purchasing a vacation home in your dream country. These include:
- Tax advantages
- A permanent place for visit-comfortable and cheap
- Rental opportunities
- A place to host and hold gatherings
- Possible retirement home
Traveling is a great way to learn about yourself and new cultures and histories. You can make friends in exotic locales, and if real estate is something you are interested in, you can make a vacation home that gives you a permanent place to stay in your favorite destinations.